Can Contract Workers Insist on Employment Continuity During Factory Renovation?

In an organization, we were working through a contractor. We engaged in the main production activity, and the principal employer appointed only a production manager; no other worker is engaged through the principal employer. Now, the principal employer wants to shut the plant for renovation. We are all permanent workers of the contractor. The principal employer is saying we are not their workers, so they have nothing to do with us. Now, our contractor wants to either settle with us or transfer us to other states. Can we insist that the principal employer continue to employ us as the factory is going to restart after renovation?

Compelling Reasons and Employment Transfer

In compelling reasons, nobody can force the employer to run the business. If the employer is interested in transferring you in the meantime, you cannot deny the same. If you are getting a better settlement, then why don't you go for it?

Contractor Employment and Principal Employer's Role

In an organization, we were working through a contractor. We were engaged in the main production activity, and the principal employer appointed only a production manager; no other worker is engaged through the principal employer. Now, the principal employer wants to shut the plant for renovation. We are all permanent workers of the contractor. The principal employer is saying that we are not their workers, so they have nothing to do with us. Now, our contractor wants to either reach a settlement or transfer us to other states. Can we insist on the principal employer to continue employing us as the factory is going to restart after renovation?

Contract Labour Act and Employment Status

First of all, your principal employer is conducting abolition under the Contract Labour Act. Core activities of the business are not allowed for contract work. I am assured that the authority has not yet issued the RC to them and has not granted a license to the contractor either. If they haven't issued the RC and license, then automatically all staff shall be considered as direct employees of the principal employer.

Regards,
Tushar Swar

It is difficult to answer your query because it is not clear to me whether the Principal Employer has obtained the Certificate of Registration in respect of the Factory in question under the Contract Labour Act. Assuming the Principal Employer has obtained the Certificate of Registration and issued Form - V to the Contractor at the time of engaging contract labor by virtue of an agreement. Upon receipt of Form - V, the contractor has applied for the issuance of a Labor License from the Labor Department and obtained the same. In that event, the Contract Labors cannot insist the principal employer to continue their employment.

For further queries, you may contact me.

Regards,
Sibabrata Majumdar
Management Consultant - Legal & HR
Mb: [Phone Number Removed For Privacy Reasons]